Australia at risk of wasting billions on water infrastructure

Posted 4 October 2017

Money
The Productivity Commission’s draft report has warned Australia is at risk of spending billions of dollars on water infrastructure that isn’t needed due to inadequate planning.

The draft report – produced in response to a government request for an inquiry into national water reform – stated money is being wasted due to lack of cost-benefit analysis, misdirected subsidies and a failure to sufficiently plan dams and water distribution works.

“There has been a tendency for public investment in irrigation infrastructure to deliver less than the anticipated benefits,” the report stated.  

“Many past projects were not economically viable and have placed both immediate and ongoing costs on taxpayers.”

The draft report also stated that in many instances appropriate analysis is either missing from business cases or completed after funding has already been allocated. 

“The business cases supporting irrigation infrastructure projects have often been found to be inadequate. Some of the more common shortcomings of irrigation infrastructure business cases include: overly optimistic estimates of a project’s viability, invalid assumptions and inadequate sensitivity analysis,” the report stated. 

“Another failing is completing the analysis only after a funding decision has been made and publicly committed to.”

The report also noted that dams and other irrigation projects that could be subsidised with the Northern Australian Infrastructure Fund are not required to be compliant with principles under the National Water Initiative.

Take a look at the full draft report here

The Association is encouraging all members to read the draft Interim Report and make your thoughts known to the Association through any of its Specialist Networks, Branches, or with comments direct to the Association at news@awa.asn.au.

The Association will be working closely with other organisations and stakeholders to present the Productivity Commission with the views of the water industry to this draft Interim Report.

Public hearings will take place across the country. The dates are as follows:

Canberra, ACT – Monday 16 October 2017
Sydney, NSW – Tuesday 17 October 2017
Brisbane, QLD – Thursday 19 October 2017
Melbourne, VIC – Tuesday 24 October 2017
Perth, WA – Thursday 26 October 2017
 
 
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Productivity Commission releases draft report on water policy reform